Law Enforcement and Economic Growth

AuthorBernard Nainggolan
PositionFaculaty of Law, Universitas Kristen Indonesia, Jakarta 13630, Indonesia
Pages37-43
37
Balkan Journal of Interdisciplinary Research
IIPCCL Publishing, Graz-Austria
ISSN 2410-759X
Acces online at www.iipccl.org
Vol. 6 No.1
May, 2020
Law Enforcement and Economic Growth
Bernard Nainggolan
Faculaty of Law, Universitas Kristen Indonesia
Jakarta 13630, Indonesia
Abstract
One aspect of infrastructure development by the government in order to spur economic growth
is law product publication. Classical economic theory states, later updated by Johan Maynard
Keyness (1883–1946), that full empoyment will occur if the government involves in market.
This research aims to investigate the association between law product, that is Law mandates of
equal remuneration for females and males for work of equal value, with economic growth. The
data used in this study came from the World Development Indicators of the World Bank for
183 countries during 2012–2016. The dependent variable is the GDP per capita (current US$).
Meanwhile, the independent variables include mineral rents (% of GDP), access to clean fuels
and technologies for cooking (% of population), and Law mandates equal remuneration for
females and males for work of equal value. The data were analysed bivariately using sca er
diagram and multivariately using a f‌i xed e ects model for panel data.
The bivariate analysis results show that the higher the mineral rents and access to clean fuels
and technologies for cooking, the higher the economic growth, and, on average, economic
growth is higher in countries where Law mandates equal remuneration for females and males
for work of equal value.
Meanwhile, the results of multivariate analysis show that, a er controlling for the e ects of
other factors, higher economic growth are siginf‌i cantly and statistically associated with high
mineral rents and access to clean fuels and technologies for cooking and with Law mandates
equal remuneration for females and males for work of equal value. Other things being the
same, on average, GDP per capita is higher US$9,395.10 in countries with Law mandates equal
remuneration for females and males for work of equal value than in countries with no such
Law. In addition, an increase of 1% of GDP in mineral rents and 1% in access to clean fuels and
technologies for cooking will increase GDP by US$ 345.45 and US$ 282.53 respectively.
Keywords: Law Enforcement, Government, Public goods, Economic growth.
Introduction
John Maynard Keynes (1883-1946), a British economist and civil servant
(Skidelsky,2015;Barron, John M., et al,2006), developed a branch of Economy, later
called macroeconomics, remodeled classical economic theory that statescompetitive
market economy always guaranteesfull employment. Keynes says that government
intervention is needed to ensure full employment. One of government roles is to
develop law. Law is a key factor for stable and expanded economic growth (Hasani,
2016). Law creates employment opportunity and supports welfare development.
The rule of law drives countries to become democratic. Democracy can positively
inf‌l uence the role of law and play important role in economic growth. Democratization
and law rule foster economic growth in Albania (Hasani, 2016). Meanwhile, Philipsen
and Guangdong Xu (2014) explored law rule and regulation in maintaining f‌i nancial

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT